Your industry is question 19 in the Product and Market section of the Questionnaire. It sets several default parameters in the financial methods, so changing it changes your valuation. You can pick it yourself from the list, or describe your company and let Identify with AI suggest up to 6 industries for you to choose from. Nothing changes in your saved questionnaire until you click Apply on a suggestion and save.
Which industry list does Equidam use?
Equidam uses the Thomson Reuters Business Classification (TRBC). It has three levels: business sector, industry, and the specific activity within that industry. The question counts as answered only when you select an activity, the most specific level. Search for a term in the picker, or browse the full list by clicking the green arrow.
How should I choose my industry?
Choose the industry your main customers are interested in, not what your company does or what your product is. A software tool sold to logistics firms, for example, may belong closer to logistics than to software. If two industries both seem to fit, try each one and compare the valuations: change the industry and the outcome changes.
What does my industry change in the valuation?
The industry supplies default parameters that the financial methods use. Each value is taken from the most specific TRBC level that has one.
EBITDA multiple: the industry gives a default EBITDA (earnings before interest, taxes, depreciation and amortisation) multiple. The multiple the VC method and DCF with multiples actually use depends on your multiples settings.
Industry beta: one of 4 components averaged into the beta behind your discount rate (WACC), used by both DCF methods.
Long-term growth: the default growth rate in DCF with long-term growth.
Depreciation, receivables, inventory and payables: default ratios to revenue that fill these rows in your financial projections, unless you have entered your own values.
You can override beta and long-term growth in Advanced Settings; on the free plan you can view these settings but not save changes. The multiple is chosen on the Advanced Multiples tab, and the EBITDA multiple article linked below explains each source. The industry still sets the defaults you start from.
How do I use Identify with AI?
Open the Questionnaire and go to question 19, Industry.
Click Identify with AI.
In the text box, describe your company: what it does, whether it produces or only distributes, who the customers are, and what they would buy instead.
Click Suggest Industry and wait for the list to load.
Hover over a suggestion to see its business sector and industry.
Click Apply next to the activity that fits best.
Save the questionnaire to keep the change.
You choose one suggestion, or ignore the list and use the picker. If none of the suggestions fit, rewrite the description with more detail about your customers and click Suggest Industry again.
What data does Identify with AI send?
Only the description you type in the text box is sent to an external AI model provider. No other questionnaire answers are sent with it. The provider returns TRBC activity codes, and Equidam checks each one against its own industry list. Codes that are not in that list are dropped before you see them. For the current list of AI providers and how your data is handled, see the AI data article linked below.
Limits
Availability: the button is on the full Questionnaire, which opens after your first estimate is complete. It is not available during the 10-question estimate, and it is not restricted to paid plans.
Description length: the text box accepts up to 700 characters. A description under 3 characters is rejected.
Number of suggestions: up to 6 per request.
Rate limit: up to 20 requests per minute per user.
Failure: if the AI service is unavailable, takes too long, returns nothing usable, or you hit the rate limit, you see "There was an error with the AI service. Please try again later." Your current industry is not changed. Try again later, or add detail to your description if the problem repeats.
Common questions
Why did I get an error after clicking Suggest Industry?
The AI service may be unavailable, may have returned no industry that matches the TRBC list, or you may have sent more than 20 requests in a minute. Wait a moment and try again, and give more detail about your customers if it keeps failing.
Can I change my industry later?
Yes. Change question 19 in the Questionnaire at any time and save. The default parameters update to the new industry.
Why did my valuation change when I changed industry?
The industry sets the default beta, long-term growth, several financial ratios and the default EBITDA multiple. A different industry gives different defaults, so the DCF methods and the VC method can produce different results.